Staying updated with the latest tax news is important for everyone, particularly when changes in the tax code are imminent. For many taxpayers, the expiring tax reforms from the Bush tax era will have an effect on 2011 tax returns. This year also provides an opportunity to take advantage of the current system and realize potential savings. With opportunities to save money on income taxes, estates and gifts, it’s a good time for taxpayers to seek counsel from tax lawyers who can help sort things out for a smooth transition as the current laws change.
How Taxpayers can Realize Savings in 2012
A trust is one way to protect money, even as tax reforms expire and new tax laws go into effect. Regardless of what state an individual or joint taxpayer lives in, he or she can establish a trust to protect money for future generations as estate taxes go up. Since both members of couples can open trusts individually with as much as $5.12 million tax-free, there are particular benefits for financial partners. Business owners are encouraged to act this year, as well, since their employees and families may be out of luck if they fail to consult with tax experts.
Families and individuals with a considerable amount of wealth can also protect the value of their assets for future generations by making personal gifts instead of leaving their entire estate in an inheritance that will be heavily taxed under new tax reforms. The current law still holds that individuals can give gifts of as much as $13,000 without filing a gift tax return, and even if they give a gift equaling as much as $5.12 million, they still won’t owe any gift tax on it after filing. There are indications that this will soon change, though, so 2012 is a time to take advantage of the current system.
It’s particularly important for taxpayers with investments to get accurate tax information as new reforms go into place. Taxpayers with investments can currently claim as much as $3,000 of losses that they’ve been carrying since the market’s plunge a few years back against current income or net capital gains. Any other net capital gains will be taxed at a higher rate next year. There are many ways for taxpayers to realize savings in 2012 with expiring tax reforms and new tax reforms waiting around the corner, which is why it’s so important to get expert advice.
We can help you with tax planning for your 2012 tax year. Please call us at (866) 493-5400 for a complimentary initial consultation with one of our tax professionals.